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Insight Changes Are Ahead For Boise’s Impact Fees

All new real estate development in the city of Boise is subject to the imposition of impact fees. Impact fees can represent a significant portion of construction costs and can make or break the viability of a development.

Boise’s impact fees have been static since 2008, but the city is now preparing to enact several changes. These changes include both the means by which impact fees are assessed and the actual impact fees themselves.

Impact fees

New development puts a strain on public facilities and services, including fire and police services, roads and open spaces. Impact fees are intended to impose on the developer the costs of constructing, improving, expanding or enlarging new or existing public services and facilities.

In general, impact fees are determined by: 1) calculating the anticipated cost of expanded or additional public facilities and services projected to be required as a result of anticipated growth from future development; and 2) proportionately allocating these costs between new development in order to keep the same level of service or standards as set by the governing entity (e.g., park acres to overall population; policing services to overall population; or existing response time for fire services).

New development that is expected to have a high impact on the level of service or standards will in general pay higher fees than new development expected to have a low impact on the level of service or standards.

Impact fees were introduced in Idaho in 1992 when the Idaho Legislature passed the “Idaho Development Impact Fee Act” (the “Act”). Idaho Code Title 67, Chapter 82. The Act allows certain governmental entities to adopt an impact fee ordinance and impose impact fees on developers as a condition of permitting new development to proceed. Soon thereafter, Boise adopted the Boise Development Impact Fee Ordinance, which can be found under Title 4, Chapter 12 of the Boise City Code (the “Ordinance”).

Boise is proposing the following revisions to its ordinance:

1. Revision of allocation methodology to include consideration of demand on public facilities and services based on the historic usage of public services and facilities by each land use category (i.e., residential, commercial or industrial) ;

2. Division of the existing “non-residential” category into separate commercial and industrial categories;

3. Revision of the existing Capital Improvement Plan which sets forth the anticipated cost of expanded or additional public facilities and services projected to be required as a result of anticipated future growth from future development; and

4. Implementation of annual increases in impact fees following the Construction Cost Index.

If these revisions are adopted, impact fees on new development will change. The following graphs from the City of Boise identify the existing impact fees for new development and the anticipated impact fees under these proposed revisions:

Non-Residential FIre and Police impact fees

Residential Fire and Police impact fees

The city is still finalizing the proposed revisions and is accepting comments from the public at impactfees@cityofboise.com.

While it can be difficult to tell without looking carefully at the tables above, if the proposed changes are adopted many categories of future development could face substantially higher impact fees than those paid now.

For more information, please contact our Business Group or call 208.344.6000.

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